Question

Jun 8th, 2013

Steve1995

Category:

Other

Price: $15 USD

Question description

In this assignment, you will use this information to create an income
statement and then analyze it for profitability. Selected accounts for
Jackson, Inc. are listed below along with their balances before closing
the year of 12/31/12. Jackson, Inc. is a firm that manufactures wireless
mouse systems for laptops. Use this information to complete the
required elements below.

Interest expense

$ 2,000

Sales revenue

297,000

Selling expenses

38,200

Administrative expenses

16,700

Cost of goods sold

162,300

Dividends1

12,200

Gain on sale of equipment

3,600

Loss from fire

7,500

Retained Earnings (1/1/12 balance)

335,000

Tax expense

22,800

The
current syllabus cites a previous edition of the textbook. The attached
update is correct for Winter and Spring—all current and upcoming terms.

1Dividends were declared and paid to Jackson, Inc. stockholders

Required:

On
a spreadsheet, prepare a multistep Income Statement for the year ending
12/31/12 with proper heading. See link below for sample income
statement. Near the bottom of your income statement should have a
subtotal for Income before taxes and then subtract taxes to compute Net
income. Net income should have a double underline.

On the same
spreadsheet, prepare a Statement of Retained Earnings for the year
ending 12/31/12 with proper heading. See link below for sample statement
of retained earnings. There are no adjustments to retained earnings and
ending retained earnings should have a double underline.

On
the same spreadsheet, compute the gross profit margin, operating income
margin, and net profit margin for 2012, showing the numerator and
denominator for all ratios. Take ratios out to the nearest hundredth of a
percentage (e.g., 33.33%).

On the same spreadsheet, write a
paragraph analyzing each of the profitability ratios for Jackson, Inc.
given the following information from previous years and competitors.

Gross profit margin

Operating income margin

Net profit margin

Jackson, 2011

47.22%

26.52%

17.75%

Jackson, 2010

48.87%

25.43%

17.03%

Competitor, 2012

43.22%

31.20%

21.14%

The following links provide sample formatting for income statements and statements of retained earnings.